Nvidia vows to counter any EU concerns over $54bn Arm takeover

Investigation into US tech firm’s proposed acquisition of British chip designer expected

Last modified on Fri 27 Aug 2021 07.08 EDT

The US multinational technology company Nvidia has said it will answer “any concerns” raised by the European Commission as regulators appeared set to launch an investigation into the firm’s proposed $54bn (£39bn) purchase of the British chip designer Arm.

The world’s leading maker of graphics and artificial intelligence chips is expected to notify the commission early in September of its plan to purchase Arm, when regulators would likely undertake a preliminary review.

The UK’s Competition and Markets Authority has already said that after its initial assessment the deal raises “serious competition concerns” as it threatens to “stifle innovation across a number of markets”.

Arm licenses vital intellectual property to other chipmakers. There are concerns that the deal proposed would give Nvidia the ability to damage its rivals by reducing access to Arm’s products, a claim denied by the US company.

The UK government is also examining the deal on national security grounds, raising a further obstacle to its completion. The UK culture secretary, Oliver Dowden, could clear the deal, approve it subject to certain undertakings or ask the CMA to launch a more detailed phase two investigation.

Such has been the reaction within the industry and among regulators to the prospective deal announced last September, that Nvidia has already had to concede that the purchase will not take place within the 18-month timeframe initially planned.

Nvidia has nevertheless claimed to have the backing of the Arm customers MediaTek, Broadcom and Marvell.

Once the company notifies the commission there will be a 25-working day preliminary review, during which the company is likely to offer some concessions in order to smooth the regulatory process. It is expected that there would then follow a 90-day full-scale investigation by commission officials.

A spokesman for Nvidia said: “This transaction will be beneficial to Arm, its licensees, competition, and the industry. We are working through the regulatory process and we look forward to engaging with the European Commission to address any concerns they may have.”

In the last financial year, Nvidia’s revenue was $16.68bn, up from the $10.92bn in 2020.

A commission spokeswoman said: “We have no specific comment. This transaction has not been formally notified to the commission. If a transaction has an EU dimension, it is always up to the companies to notify it to the commission.”

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